Trading Mistakes A Trader/Investor Should Aviod.

Let everybody think and add their point. Of course, based on some experience which they feel a trader or an investor should avoid them.

The idea behind this thread is just LIST DOWN every mistake a trader or investor performs in the stock market.

I add few things. Let others contribute. Let us make long list.

1.Trading with money you can’t afford to loose: One of the greatest obstacles to successful trading is using money that you really can’t afford to lose. Ultimately what happens is that when someone knows in the back of their mind that they are risking the money they can not afford to lose, they trade out of fear and emotion versus logic and no emotion. If you are in this situation It is highly recommend that you stop trading until you earn enough to put into an account that you truly can afford to lose without causing major financial setbacks.

2.Lack Of Research Work: People just jump in. Without having the proper knowledge of the stock or don’t knows about chart or never cares to view chart in the right time frame. They don’t have time to do some research work. They follow tips blindly and then gaze at night sky!

3.No Trading Plan (don’t know entry, exit, stop loss, profit target): A trader with no trading plan is flying in the sky ready to crash any time. Successful traders always keep their Trading Plans ready before entering into any transactions.

4.Not Learning From Losses – take advantage of each loss to improve your knowledge of the market.

5.Lack Of Discipline- Never allow emotions to rule your trading decisions, which often lead to bad decisions and unacceptable trading losses.

very good info

6.Lack Of Money Management – Lack of proper money management is a major cause of failure among new traders.
(Out of 10 Trades, if 6 are loser with 5% loss & 4 are winner with 10% PROFIT, Net Results GAIN.)

7.Never Apply STOP LOSS – Most common mistakes made by traders is that they let their losses grow too large. Nobody likes to take a loss, but failing to take a small loss early will often result in being forced to take a large loss later.

8.Never Fall In LOVE With A Stock – Many traders fall in love with one or two stock and look opportunities to trade in those stocks only ignoring the other profitable trading opportunities.

9.Not Keeping RECORDS – Always keep records of your trading results and analyze the results.

10.Over-Trading – Trading in too many markets at one time is a mistake – espically if you are racking up losses.

Thanks a lot for 'THE TEN COMMANDMENTS' of TRADING STOCKS.

There are plenty of points, but important is to study these points and apply it - to save one-self from destructions.

Contd….

11.Not Preserving Capital: It is the part of money management so as to enable one to live to trade another day.

12.Under funding-Not enough capital to invest (this can sink the ship) know well that there is a minimum amount to be invested.

13.Blaming the Market: Don’t blame the market for your losses. You are the sole reason for losses.

14.Adding to a losing Position - Never add to a losing position. It is a prescription for disaster.

15.Not getting a bigger view/perspective on Market – One can look at daily chart for short-term, but by looking at the weekly or monthly chart for longer-term can reveal great secrets of the market.

16.Trading with a high EGO– A person who do not expect that he would be wrong and refuse to get out of bad trades. This ego becomes the downfall.

17.Never use these things - HOPE, PRAYER THAT PRICE WILL MOVE UP

18. Ignoring the five basic pillars of trading :

•Trade with trend,
•Cut losses fast,
•Let profits run,
•Trade selectively,
•Trade in the major index direction.

19.The key to wealth in trading is simplicity. Avoid techniques you don't understand.

20.Big movements take time to develop. Stay always PATIENT.


That’s all I have for now, I will add more points which I feel important.

I Hope this thread will be helpful for beginners in the stock market.

THANKS
BULLET

Your views are practical and should serve all traders well. I do wish to add- sometimes it pays to average out your losses by buying at a lower rate if you are stuck with a lot and secondly, do not forget to apply stop loss and stop profit. It saves a lot of money and headache

commendable compilation,more commendable is the invite fr others to add =thereby not claiming to be the alpha&omega of alltrading knowledge.
how about this...
keep in mind that when you buy a scrip ,you are not buying abusiness much less the company. you may have received an annual report with the printed signature of dhirubhai ambani/jrd/gd birla or their presentday equvivalents/new icons BUT YOU R NOT BUYING THE BUSINESS HOUSE!

you buy the scrip to make profit ..so learn to take profit home when there is profit retrieve your capital so that you can sleep happy
do not ape others be yourself if you r timid-read risk averse-fine so be it ..swim at the shallow end of the pool in small doses.. this will keep you on high and in your element.dont envy or ape learn and prepare yourself if you want to do the highdive discipline technique hardwork quick execution acknowledging mistake and correcting are the cornerstones

if one is not good at quickly severing the attachment in reallife relationships,just sit down fr a week select world class companies in sunrise sectors dont look at the price /index keep a 5 year dead line and freeze these scrip in demat a/c revisit them in 6th year if the bottom has fallen off the world you will still be richer than furious traders of the day/swng what hv you if the markets are booming are unchanged you r miles ahead while working on the other businesses/relaxing in youownway all the while

if you want to dabble and hv a try just do that a try. donot get reveng mode or junkhead mode
if u want to make a living be a pro... terrible discipline and terrific devotion

know that it is a brave man who speaks of his failures/losses and cultivate such ones gul,malkani and rajatbose on cnbc are the only ones who speak thus!!
always remember that with cash in hand you can buy an asset help another person buy medicare fr you and yours .. with a scrip/bond mf unit insurance policy you are not hasslefree so keep adequate and emergecy cash always at hand and out of reach of investing fingers.
call it invest/trade gamble or anything understand your abilitylimit your profitgoal -timeframe your risk limit . if your profitgoal price is reached in doublequick time and no letup of winningstreak partly book profit and rideup then get off when price dipsfr 2 sessions dont hang on you can buy at higher price if it resumes!!!
ABOVE ALL THE MARKET IS LIKE A WOMAN NO ONE EVER MASTERS A WOMANS MIND FR LONG !!!!! SO BE HUMBLE AND TAKE THE TOSSOUTS SHE DEALS YOU LAUGHINGLY

bullet,
Thank for the nice compilation